Hurricane Katrina: Gas and Oil Shortage

Two events occurred simultaneously when Hurricane Katrina struck the Gulf Coast on August 29, 2005. There was an oil and gas shortage and prices at the pump jumped, if gasoline was to be found.

Early on the morning of August 30, 2005, Reuters' Mark Wallheiser reported that "On its way to the coast, the storm swept through oil and gas fields in the Gulf of Mexico where 20 percent of the nation's energy is produced.

"At least two drilling rigs were knocked adrift in the gulf and another in Mobile Bay, Alabama, broke free of its mooring and slammed into a bridge.

"U.S. oil prices on Monday jumped nearly $5 a barrel in opening trade to peak over $70 and on Tuesday was holding above $68 as oil firms assessed damage from the hurricane."

In his August 31, 2005, announcement on "Hurricane Katrina Relief Efforts," President George W. Bushsaid:

"The Department of Energy is approving loans from the Strategic Petroleum Reserve to limit disruptions in crude supplies for refineries. A lot of crude production has been shut down because of the storm. I instructed Secretary [Sam] Bodman to work with refiners, people who need crude oil, to alleviate any shortage through loans. The Environmental Protection Agency has granted a nationwide waiver for fuel blends to make more gasoline and diesel fuel available throughout the country. This will help take some pressure off of gas price. But our citizens must understand this storm has disrupted the capacity to make gasoline and distribute gasoline."

Fuel Rationing

"Georgia Gov. Sonny Perdue asked the state's schools to take two 'early snow days' and cancel classes Monday and Tuesday [September 26 and 27, 2005,] to help conserve gasoline as Hurricane Rita threatens the nation's fuel supply line," the Associated Press reported September 24, 2005. "If all of Georgia's schools close, the governor estimated about 250,000 gallons of diesel fuel would be saved each day by keeping buses off the road."

Fuel Shortage in Iraq

If it's any comfort to U.S. citizens at home, Juan Cole commented September 7, 2005, on the Reuters' September 4th report that Iraq has instituted gasoline rationing:

"The US has managed oil-rich Iraq so well during the past 2 1/2 years that the country has instituted gasoline rationing. Not only can you fill up only every other day, but now you can only drive in Baghdad every other day. I guess if you live far from your work in the city, you are out of luck. Of course, given the likely unemployment rate of 50 percent, this problem does not affect that many people."

Greg Bluestein, "Retail gas prices jump, deliveries falter," Associated Press (OregonLive.com), September 1, 2005: "Gas stations in and around downtown Atlanta had temporarily run out of gas. The same was reported elsewhere, including parts of North Carolina, West Virginia, Wisconsin and Arizona. Many retailers who did have gas had no clue when their next shipments would come in."

"U.S. Interior Secretary Gale Norton Reports on Gulf of Mexico Energy Status,"RigZone, October 4, 2005: "Of the 4,000 platforms that the MMS administers, 3,050 platforms were in the path of Hurricanes Katrina and Rita. The preliminary damage assessment indicates that 108 of the older "end of life" facilities not built to MMS' upgraded design standards were destroyed. They account for only 1.7% of the Gulf's oil production and 0.9% of the Gulf's gas production. Another 53 platforms suffered significant damage. As a result, only a very small percentage of production is expected to be permanently lost."